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LONDON (Alliance News) - Newspaper-owner Reach PLC swung to a significant interim loss, the company said Monday, as it booked a GBP150 million impairment charge on the value of its regional newspaper businesses.
Reach, which used to be known as Trinity Mirror, posted a GBP113.5 million statutory pretax loss for the 26 weeks to July 1, compared to a GBP38.2 million profit in the same period a year earlier.
On an adjusted basis, pretax profit rose 5.5% to GBP64.7 million from GBP61.3 million a year prior.
Reach's revenue rose 11% to GBP353.8 million from GBP320.0 million, mainly due its acquisition of the Daily Express and Daily Star titles in March. On a like-for-like basis, revenue fell 7.2%, and Reach expects July revenue to fall 7% year-on-year.
Publishing's print revenue fell 9.3% like-for-like, but like-for-like digital revenue within the Publishing arm increased by 6%.
Overall, Publishing revenue Increased to GBP330.4 million from GBP296.4 million, with both print and digital increasing, boosted by the Express and Star acquisitions.
Reach is paying an interim dividend of 2.37 pence per share, 8% higher than that paid in the first half of its last financial year.
The main impact on Reach's interim profit was the GBP150 million impairment charge it has made against the value of its regional businesses, which are experiencing a "more challenging" trading outlook than expected, especially in local advertising.
Reach has a large portfolio of regional UK newspaper titles, as well as the national papers The Daily Mirror and its Sunday sister paper, the Daily Record, the Western Mail, and The People.
Looking ahead, Reach said it expects to meet market expectations for all of 2018. This has adjusted pretax profit in the range of GBP131.7 million to GBP133.9 million. The figure for 2017 was GBP122.5 million, down from GBP133.2 million in 2016, which had an extra week.
Chief Executive Simon Fox said: "We have delivered a positive financial performance in what remains a difficult trading environment for the industry, in particular the regional businesses. The benefit of improved performance from national print advertising coupled with further cost mitigation will support profits over the year despite a further increase in newsprint prices for the second half.
"We have started the process of integrating Express & Star in order to accelerate the benefits our combined scale will deliver and have a clear strategy which fully reflects the changing shape of the group."
Shares were 3.6% lower on Monday at a price of 70.20p each.
